This Week in Africa Finance

Beltone Investment's $100 million private credit platform, Kenya's $2 billion PPP airport project, and Airtel Africa's $200 million debt facility.

In Today's Email:

• Corporate Debt: IFC mulls a $200 million debt facility for Airtel Africa.
• Private Credit: Beltone Investment Holding launches a $100 million Private Credit Platform.
• Marco and Market Matters: Nigeria and Kenya get improved Fitch Rating
• Banking Essentials: Ecobank grows profit after tax to $407 million.
• Infrastructure and Project Finance: Kenya targets $2 billion in PPP for airport projects.
• Deals: Notable deals of the week.

Corporate Debt

IFC Considers $200Million Debt Investment in Airtel Africa.

The International Finance Corporation (IFC) is considering providing Airtel Africa with a debt financing facility of up to $200 million.

Some Context: Airtel Africa plc provides telecommunications, data centres, distribution networks, and mobile money services across 14 West, Central, and East African countries. The company intends to use the new funding to support its operations in the Democratic Republic of Congo (DRC), Rwanda, and Kenya and cover capital expenditure (CAPEX) to modernise the telecom network and refinance its USD-denominated debt. Airtel Africa also secured $194 million in financing in December 2022 from the IFC to fund it in Kenya, Madagascar, DRC, Zambia and Niger.

The bottom line: The African telecom market is highly competitive, even with Airtel Africa's 151.2 million customers across its 14 markets. To meet this challenge, the company recently changed its business model to focus on an asset-light strategy, which includes disposing of its tower infrastructure in some parts of the African market and then leasing it back from the new tower owners to achieve operational and capital efficiency.

Private Credit

Egypt's Beltone Investment Holding Launches $100Million Private Credit Platform.

Egypt-based Beltone Investment Holding (BIH), an affiliate of Beltone Holding, has launched a $100 million private credit platform to support Egyptian exporters.

Why is this important: Few private credit offerings exist across Africa, and Beltone's platform provides a unique opportunity in the Egyptian financial markets. The private credit platform offers services like working capital finance and cash flow discounting to Egyptian companies looking to grow and expand across Africa and the Arab region.

The bottom line: Private Credit as an asset class has grown, offering portfolio diversification benefits for investors. Its popularity is increasing in developed markets, but Africa has yet to catch on; the Beltone platform provides a window of opportunity for other investors to learn from it and explore its possibilities. 

Marco and Market Matters 

• Kenya's Nairobi Securities Exchange has received $7.5 million of foreign investment inflows as the country's economic reform drive investor interest.
• Fitch Rating has revised its outlook for Nigeria and Egypt. In Nigeria, the rating firm has changed the outlook from positive to stable due to the country's economic reforms. It has also revised the outlook on Egypt’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to Positive from Stable.

Banking Essentials

• Ecobank Transnational Incorporated(ETI) has grown its year-on-year profit after tax by 11 per cent to $ 407 million in 2023 compared to $367 million in 2022.
• Malawi commercial bank FDH Bank has launched Islamic banking services, offering Shariah-compliant products and services. The bank is also exploring market opportunities in Zambia and Mozambique to expand its footprint across the continent.
• United Bank of Africa continues its expansion across Africa by acquiring equity stakes in its Kenyan and Ugandan subsidiaries.
• Co-operative Bank Kenya has secured a $25 million loan facility from Germany's Development Finance Institution (DFI) to support SMEs, particularly women-led businesses.

Sovereign Finance

• The European Union has committed $7.9 million to Egypt to support the country's Green Economy programme.

Infrastructure and Project Finance

• Kenya seeks a public-private partnership (PPP) to build its new $2 billion international airport.
• Uganda has secured a $295 million loan from Saudi Arabia's Islamic Development Bank for the construction of roads.
• Shell Nigeria Gas (SNG) and Nigeria's Oyo state government have signed an agreement of over $100 million to build and operate a gas distribution network.
• Deutsche Bank AG and The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a Shariah-based multilateral insurer and a member of the Islamic Development Bank (IsDB) Group, have agreed a strategic funding of €161.4 Million for the Government of the Republic of Côte d’Ivoire for the construction of new general and regional hospitals in the cities of Kong and Odienne, to help boost the country's healthcare infrastructure.

Trade Finance

• British International Investment (BII), a development finance institution and leading global investment bank Citi, have committed to a $100 million risk-sharing trade finance facility for growing emerging African economies. 

Deal Flow 

M & A 

• Kenya-based BuuPass, a mobility startup, has acquired QuickBus as it continues its expansion in Nigeria and South Africa
• GrubMarket, a US-based AI-powered technology enabler and digital transformer of the American food supply chain industry, has acquired Cape-based Global Produce, a South African-based fresh produce distributor, to grow its international presence.
• Igot, the Australian Bitcoin exchange, has acquired a Kenyan-based crypto exchange and remittance gateway, TagPesa, for an undisclosed sum.
• Ignite Power has acquired the Senegal-based Oolu the distributed renewable energy solutions provider.

Industrials

• Ethiopia-based building material company Kubik has raised $5.2 million in seed funding from investors such as African Renaissance Partners, Endgame Capital, and King Philanthropies.
• Nigeria-based Renda, the e-commerce logistics and fulfilment provider, has secured $1.9 million in funding to continue its expansion plan in Nigeria and Kenya. The $1.3 million investment was led by Ingressive Capital, with other investors including Techstars Toronto, Golden Palm Investments, Magic Fund, Reflect Ventures and Vastly Valuable Ventures. $600,000 in debt funding was provided by Founders Factory Africa and SeedFi.
• Nigeria-based Chowdeck, the logistics company, has raised $2.5 million in seed investment from investors like Y Combinator, Goodwater Capital, FounderX Ventures, HoaQ Fund, Levare Ventures, True Culture Funds, Haleakala Ventures. Others include Ezra Olubi, Simon Borrero, Shola Akinlade and Juan Pablo Ortega

Agribusiness

• TradeMarkAfrica (TMA), an Aid-for-Trade organisation, and the Tanzania Horticultural Association (TAHA) have signed a $2.1m grant agreement funded by the UK Foreign, Commonwealth & Development Office (FCDO), Norway, and Ireland to complete the second phase of the horticultural market expansion project.
• The African Development Bank (AfDB) and the Islamic Development Bank Group (IsDB), with the International Fund for Agricultural Development (IFAD), have launched a $538 million programme to develop special agro-industrial processing zones in Nigeria.

GP/LPs Activities

• AgDevCo, the Africa-focused specialist agriculture investor, has acquired a minority equity stake in Agris- the East African agribusiness platform Maris Ltd owns.
• The European Investment Bank(EIB) has committed $50 million to Quona Global Gateway Fund IV, managed by Quona Capital Management.
•  FMO, the Dutch development bank, has committed $10 million to TIDE Africa II, the second Africa-focused of TLcom. Other investors are the European Investment Bank, AfricaGrow, Visa Foundation and Bertelsmann

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